Smart contracts allow the platform to store and run computer programs and enables developers to build and deploy decentralized applications using a permanent, trusted record of assets and transactions. ETH also finances the Ethereum Swiss Foundation.

“We are building a bridge between the human readability of cryptographic addresses and machine readability. While some others are working similar platforms that they feel may have their own advantages, the size of the development teams around Ethereum ballooned with initial spikes in interest to something larger than anything else in the space. With that, application development, innovation in scaling and other areas followed the trend, thereby creating a snowball effect.”

Ron Resnick, Executive Director of the Enterprise Ethereum Alliance, which launched in 2017, had this to say:

“EEA serves as the connective tissue between Ethereum Blockchain and the evolving enterprise industry with over 450 members from all around the world — 135 in the Banking Work Group — which are driving production deployments through a community of over 30,000 developers.”

It’s not only blockchain innovation in which Canada excels…

According to Hydro Quebec, the province of Quebec has an energy surplus equivalent to 100 Terawatt hours over 10 years and, therefore, offers some of the lowest electricity rates in North America. This has drawn many cryptocurrency miners to the region from around the world, most notably China.

China’s Bitmain Technologies began mining in Canada in 2016 when ETH traded at $1. Once the ETH price rose 63,600% to $636 with no implemented hard cap on the total ETH supply, Bitmain then announced a new specialized mining system for ETH in Quebec where it takes on average 29.05 TWh annually to operate a cryptocurrency mining operation, approximately 0.13 percent of total global electricity consumption.

While this may seem like bad news for the smaller cryptocurrency miners in the region, a local ETH miner dismissed concerns.

The miner was noted as having said, “Quebec is one of the best places in the world for mining, thanks to low cost electricity, cool temperatures, and high-speed internet. There’s a lot of data centers in Montreal and they’ll rent you a space for your own server or ZTE smartphone–Sugar S11. Since you’d be paying about half to 1/3rd the electricity price of Ontario, then the added expense of rent is well worth it.”

However, Quebec Premier Philippe Couillard recently warned, “Cryptocurrency miners planning to move to the region will not get cheap electricity from the government-owned utility Hydro-Quebec, as the utility may not have enough power to meet the demand.” The utility has since received an legal order to await instructions.

Canada not only takes a lenient approach to cryptocurrency regulation; it offers a wide selection of government incentives and aid to startup tech companies.

Excessive regulation has been known to stifle blockchain innovation.

Last year, with the surge in Ethereum Blockchain based ICOs which raised $4 Billion worldwide, the Canadian Securities Administrators suggested Canadian Securities Law may be potentially applicable to cryptocurrency. The Ontario Securities Commission (OSC), on the other hand, granted regulatory relief to allow Ontario’s first regulated ICO under existing exemptions in securities laws.

Furthermore, the British Columbia Securities Commission approved Canada’s first registered cryptocurrency investment fund, legally acknowledging it classifies cryptocurrency investments as a new way to invest. This ruling is important because it allows pension, investment and venture capital funds, including the Ontario Municipal Employees Retirement System’s Ethereum Capital, to invest in cryptocurrency.

So far in 2018, Canada’s first blockchain exchange-traded fund began trading on the Toronto Stock Exchange.

Meanwhile, OSC started to examine the business activities of several exchanges amid concerns of tokens being traded which would otherwise qualify as securities.

The Canada Revenue Agency (CRA) began taxing cryptocurrency in 2013, but, to foster technological and scientific innovation, Canada’s Federal and provincial governments provide various Research and Development (R&D) tax incentives to offset these costs.

“Laura Gheorghiu, a tax partner at Gowling WLG, explained that the CRA has characterized cryptocurrency as a commodity, therefore the exchange of it becomes a taxable event as a barter transaction giving rise to either business income (fully taxable) or capital gains (50% taxable)— depending on the facts and circumstances– measured according to the value of the assets exchanged in Canadian Dollars,” according to Cointelegraph.

If a cryptocurrency is held as a capital asset like an investment should be, then the ensuing gain is classified and taxed as a capital gain. If the cryptocurrency is situated, deposited or held outside of Canada, its owner must adhere to foreign reporting rules.

If an employee receives cryptocurrency as payment, its equivalent in Canadian dollars is taxed as income. Mining of cryptocurrency is classified as either a business and is taxed, or, a personal hobby which is non-taxable. Furthermore, cross-border payments of rents or royalties in cryptocurrency to a non-resident are subject to a withholding tax of 25%, which may be reduced under an applicable tax treaty.

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